Republican Plan for Proprietary Colleges Draws Fire

Republican Plan for Proprietary Colleges Draws Fire

Article excerpt

Should for-profit, proprietary institutions be considered in the same way as traditional nonprofit schools? The House of Representatives Committee on Education and the Workforce held a hearing June 16 to consider how federal funding is doled out to proprietary schools under the proposed College Access and Opportunity Act, a Republican-backed measure.

As the law stands now, proprietary schools are ineligible for certain funds, and must meet other rules to continue receiving Title IV money, federally subsidized student loans. But the Republican plan would do away with these provisions.

Those in favor of the action argued that nontraditional students, who account for most of the enrollments at for-profit proprietary institutions such as the DeVry Institute, for example, need even more help than the average student in completing their studies. The separate rules are burdensome for the students, the proponents said, giving them less financial aid than their counterparts at public and nonprofit institutions.

"There is a problem when schools serving some of the neediest students are treated like second-class citizens," said Rep. John Boehner, R-Ohio, chairman of the committee.

The rules in question are the "90/10 rule" which applies only to proprietary schools and means that at least 10 percent of student tuition must come from means other than student-loan funds, and the "50 percent rule," which requires a proprietary school to offer no more than 50 percent of its courses online. These rules were enacted to address rampant fraud among proprietary schools in the 1970s and 1980s.

Supporters of the "single definition" rule say that proprietary schools are penalized for their status as for-profit, and thus are less able to help their students, even though they enroll more students at the lower end of the economic spectrum. For example, once a proprietary school nears its 90/10 limit, it would be required to turn away students needing federal aid.

"The 90/10 requirement is a disincentive," said Andrew Rosen, president and chief operating officer of Kaplan Inc., and president of Kaplan College in Boca Raton, Fla.

If a level playing field was created where all schools were treated the same, then "the money would follow the student," David G. Moore, chairman and chief executive officer of the Corinthian Colleges in Santa Ana, Calif. …